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Amazon UK figures revealed in committee tax response

Public Accounts Committee reveals details of Amazon's UK sales, as it tries to ascertain how it arrived at previous tax disclosures

28 Nov 2012 Accountancy Age

By Kevin Reed

amazon-kindle-4-e-reader-tablet-books

SALES OF £3.3BN were racked up by Amazon.co.uk in the UK during 2011, but huge costs saw it pay just £1.8m in corporation tax during the year.

In a response to the Public Accounts Committee for more financial data relating to its UK operations, profits before income tax on UK sales equated to £74m, with various costs and expenses eating into the profit margin.

The company's UK accounts filed for the period show it paid £1.8m, with revenues of £20m.

In its response to the committee, Amazon asked for the information to remain confidential.

The committee has again called on HMRC to appear before it, in an effort to tackle marketed avoidance schemes. It is believed that HMRC chief executive Lin Homer will face questions on the tax affairs of its IT supplier, Accenture.

Visitor comments

This is misleading

This article is confusing because you've failed to distinguish adequately between the legal entity Amazon.co.uk Ltd and the website Amazon.co.uk. The legal entity Amazon.co.uk Ltd recorded sales of some £207.7m in the year ended 31 December 2011. You can find that out from its accounts as filed with Companies House. It may be true that goods with a value of £3.3bn were sold to people in the UK during the same period. But these sales weren't recorded in the books of Amazon.co.uk Ltd; rather they were recorded in the books of Amazon EU SarL or some other subsidiary. That structure is entirely legitimate under EU law. It's not expenses that have resulted in a low net profit but the fact that those sales are recorded elsewhere.

Posted by Christie Malry, 28 Nov 2012

But is it moral?

Christie, you have missed the point why this is an issue for a lot of people. Amazon generate a lot of income AND profit from selling to the UK market but manipulates its corporate structure to avoid paying as much tax as it can, even though UK corporation tax rates are much lower than I pay as an individual. That is what gets up my and others nose, I cannot reduce my personal tax bill claiming an alternate domicile such as Singapore where personal tax rates are low. I live in the UK so I pay UK tax. But a corporate entity can dream up structures and royalties and fulfilment centres to do exactly as it pleases. If it wants to sell to the UK and make money it seems reasonable it should pay a proportionate share back to the country that helps it generate its wealth. In the meantime, all I can do is exercise consumer choice and not but from Amazon, Starbucks et al. John Lewis is a good ethical choice (other fair UK tax paying retailers are available).

Posted by Brian Barnett, 29 Nov 2012

 

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